Interpreting Middle East Economic News and Analyzing Market Trends

Category: Commentary & Analysis

Emerging Market Debt Issuance Hits Record and Spills Over into Sukuk Market as Investors Worldwide Hunt for Yield

The funny thing about unintended consequences is that they pop up regardless of your original intentions, good or bad. I’m sure central bankers’ in the US and EU had good intentions for keeping interest rates near zero for so long, but their efforts to stimulate their economies and help them recover from a bubble collapse have led to the creation of another bubble. Record low yields in developed markets are pushing investors to search for higher yields.

 

For 2012, issuance of emerging-market bonds denominated in the U.S. dollar soared to about $375 billion, marking a record high since data provider Dealogic began tracking the data in 1995. Issuance far outpaced the previous year, when emerging-market issuers sold $235.5 billion in new debt.

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